Entertainment industry economics : a guide for financial analysis / Harold L. Vogel.

Format:

Book

Author/Creator:

Vogel, Harold L., 1946-

Language:

English

Subjects (All):

Performing arts--Finance.

Performing arts.

Physical Description:

xx, 577 pages : illustrations ; 25 cm

Edition:

Fifth edition.

Place of Publication:

Cambridge ; New York : Cambridge University Press, 2001.

Summary:

The entertainment industry is one of the largest sectors of the United States economy and fast becoming one of the most prominent globally as well. In this newly revised book, Harold L. Vogel examines the business economics of the major entertainment enterprises: movies, television and cable programming, music, broadcasting, casino wagering and gambling, sports, publishing, performing arts, theme parks, and toys. This edition incorporates a full chapter on the Internet, covering the Web's operational features and revenue sources and the Net's role as an agent of change. Other expanded features include sections on industrial structure, asset valuation methods, and comparative price trends. The result is a comprehensive, up-to-date reference guide on the economics, financing, production, and marketing of entertainment in the United States and overseas. Investors, business executives, accountants, lawyers, arts administrators, and general readers will find that the book offers an invaluable guide to how entertainment industries operate.

Contents:

Chapter 1 Economic perspectives 3

1.1 Time concepts 3

Leisure and work 3

Recreation and entertainment 4

Time 5

Expansion of leisure time 5

1.2 Supply and demand factors 9

Productivity 9

Demand for leisure 10

Expected utility comparisons 12

Demographics and debts 13

Barriers to entry 14

1.3 Primary principles 16

Marginal matters 16

Price discrimination 19

Public good characteristics 19

1.4 Personal-consumption expenditure relationships 19

1.5 Industry structures and segments 23

Structures 23

Segments 24

1.6 Valuation variables 27

Discounted cash flows 28

Comparison methods 29

Options 29

Part II Media-dependent entertainment

Chapter 2 Movie macroeconomics 35

2.1 Flickering images 36

2.2 May the forces be with you 38

Evolutionary elements 38

Technology 38

Capital 41

Pecking orders 42

Exhibition 42

Production and distribution 43

2.3 Ups and downs 44

Admission cycles 44

Prices and elasticities 46

Production starts and capital 47

Releases and inventories 48

Market-share factors 51

Collateral factors 51

Exchange-rate effects 51

Trade effects 56

Financial aggregates 58

2.4 Markets

primary and secondary 58

2.5 Assets 64

Film libraries 64

Technology 64

Utilization rates 64

Interest and inflation rates 65

Collections and contracts 66

Library transfers 67

Real estate 67

Chapter 3 Making and marketing movies 72

3.1 Properties physical and mental 72

3.2 Financial foundations 74

Common-stock offerings 74

Combination deals 75

Limited partnerships and tax shelters 76

Bank loans 79

3.3 Production preliminaries 80

The big picture 80

Labor unions 82

3.4 Marketing matters 83

Distributors and exhibitors 83

Sequencing 83

Distributor-exhibitor contracts 84

Release strategies, bidding, and other realted practices 87

Exhibition industry characteristics

Capacity and competition 89

Rentals percentages 91

Home video and merchandising 91

Home video 91

Merchandising 96

Marketing costs 96

3.5 Profitability synopsis 97

Chapter 4 Financial accounting in movies and television 103

4.1 Dollars and sense 103

Contract clout 103

Orchestrating the numbers 104

4.2 Corporate overview 105

Revenue-recognition factors 105

Inventories 106

Amortization of inventory 107

Unamortized residuals 109

Interest expense and other costs 109

Calculation controversies 110

Statement of Position 00-2 111

Merger and acquisition issues 113

4.3 Big-picture accounting 114

Financial overview 114

Participation deals 117

Pick-ups 120

Coproduction-distribution 120

Talent participations and breakeven 120

Producers' participations and cross-collateralizations 123

Home-video participations 123

Distributor

exhibitor computations 124

Distributor deals and expenses 125

Studio overhead and other production costs 128

Truth and consequences 129

4.4 Television-programming accounting 130

Feature licensing 130

Program production and distribution 134

Development and financing processes 134

Syndication agreements 135

Costs of production 138

Costs and problems of distribution 139

Timing troubles 140

4.5 Weak links in the chain 143

Exhibitors: the beginning and the end 143

producer problems 145

Chapter 5 Music 148

5.1 Feeling groovy 148

5.2 Size and structure 150

Economic interplay 150

The American scene 150

The global scene 155

Composing, publishing, and managing 155

Royalty streams 157

Performances 157

Mechanical royalties 158

Synchronization fees 158

Copyright 158

Guilds and unions 159

Concerts and theaters 160

5.3 Making and marketing records 160

Deal maker's delight 160

Production agreements 160

Talent deals 162

Production costs 162

Marketing costs 163

Distribution and pricing 163

Distribution 163

Pricing 165

Internet effects 165

5.4 Financial accounting and valuation 166

Artists' perspective 166

Company perspective 168

Valuation aspects 170

Chapter 6 Broadcasting 173

6.1 Going on the air 173

Technology and history 173

Basic operations 176

Regulation 179

Organizational patterns and priorities 180

Networks and affiliates 180

Ratings and audiences 182

Inventories 186

Independent and public broadcasting stations 186

6.2 Economic characteristics 187

Macroeconomic relationships 187

Microeconomics considerations 189

6.3 Financial-performance characteristics 190

Variable cost elements 190

Financial-accounting practices 191

6.4 Valuing broadcast properties 193

Chapter 7 Cable 201

7.1 From faint signals 201

Pay services evolve 202

7.2 Cable industry structure 203

Operational aspects 203

Franchising 208

Revenue relationships 209

7.3 Financial characteristics 211

Capital concerns 211

Accounting conventions 214

7.4 Development directions 215

Pay-per-view 215

Cable's competition 216

MMDS/LMDS 216

SMATV 216

DBS/DTH 217

STV 217

Telephone companies 217

7.5 Valuing cable-system properties 218

Chapter 8 The Internet 223

8.1 Casting a wide net 223

8.2 Rules of the road 225

Laws of the media 225

Network features 227

8.3 Operational aspects 228

Agent of change 228

Revenue sources 230

Advertising 230

Fees 231

8.4 Accounting and valuation 231

Accounting 231

Valuation 232

Chapter 9 Publishing 236

9.1 Gutenberg's gift 236

First words 236

Operating characteristics 237

9.2 Segment specifics 240

Educational/professional 240

Trade 241

Periodicals 242

Newspapers 242

Magazines and other periodicals 245

9.3 Multimedia 246

Developer/publisher issues 246

Distribution issues 247

9.4 Accounting and valuation issues 247

Accounting 247

Valuation 248

Chapter 10 Toys and games 251

10.1 Not just for kids 251

Financial flavors 253

Building blocks 256

10.2 Chips ahoy! 257

Slots and pins 257

Pong: pre and apres 258

10.3 Structural statements 260

Home video games 260

Coin-op 260

Profit dynamics 261

Part III Live entertainment

Chapter 11 Gaming and wagering 267

11.1 From ancient history 267

At first 267

Gaming in America 268

The Nevada experience 269

Enter New Jersey 270

Horse racing 273

Lotteries 273

Indian reservations, riverboats, and other wagering areas 276

11.2 Money talks 279

Macroeconomic matters 279

Funding functions 281

Regulation 282

Financial performance and valuation 283

11.3 Underlying profit principles and terminology 284

Principles 284

Terminology and performance standards 286

11.4 Casino management and accounting policies 289

Marketing matters 289

Cash and credit 291

Procedural paradigms 292

11.5 Gambling and economics 293

Chapter 12 Sports 300

12.1 Spice is nice 300

Early innings 300

Media connections 301

The wagering connection 305

12.2 Operating characteristics 305

Revenue sources and divisions 305

Labor issues 306

12.3 Tax accounting and valuation 308

Tax issues 308

Historical development 308

Current treatments 309

Asset valuation factors 311

12.4 Sports economics 311

Chapter 13 Performing arts and culture 317

13.1 Audiences and offerings 317

Commercial theater 318

On and off Broadway 318

Circus 323

Orchestras 324

Opera 324

Dance 325

13.2 Funding sources and the economic dilemma 325

13.3 The play's the thing 328

Production financing and participations 328

Operational characteristics 330

13.4 Economist echoes 331

Organizational features 331

Elasticities 332

Price discrimination 332

Externalities 333

Chapter 14 Amusement/theme

parks 337

14.1 Flower power 337

Gardens and groves 337

Modern times 338

14.2 Financial operating characteristics 339

14.3 Economic sensitivities 344

14.4 Valuing theme-park properties 346

Part IV Roundup

15.1 Common elements 351

15.2 Guidelines for evaluating entertainment securities 354

Cash flows and private market values 354

Debt/equity ratios 354

Price/earnings ratios 354

Price/sales ratios 357

Book value 357

Appendix B Major games of chance 361

Blackjack 361

Craps 363

Roulette 365

Baccarat 368

Slots 370

Other casino games 371

Poker 371

Keno 371

Big Six Wheel 372

Bingo 372

Pai Gow, Fan Tan, and Sic Bo 372

Pan 374

Trente-et-quarante (Rouge et Noir) 375

Lotteries 376

Tracks 377

Sports book 379

Appendix C Supplementary data 381.

Notes:

Includes bibliographical references (pages 435-449) and index.

ISBN:

0521792649

OCLC:

44067065